New Iran sanctions simply don’t add up


The new legislation by the venerable lawmakers in the United States, imposing sanctions against Iran (along with Russia and North Korea), has an air of inevitability. But what is inevitable doesn’t always have to be logical.

The base line is how effective these sanctions are going to be. Iran is not new to US sanctions and its economy does not depend on trade or investment from the US. In sum, the US lawmakers are hoping to impose the sanctions via the international community.

But the main difference this time as compared to previous US sanctions is that the POTUS happens to be Donald Trump and the international community regards him with profound scepticism bordering on bewilderment. The world opinion is unlikely to rally behind Trump in an enterprise to punish Iran – or on any issue.

There is a big contradiction in the Trump administration’s approach to Iran because it is legislating sanctions while also certifying that Iran’s compliance with the 15 July 2015 nuclear deal [JCPOA] is satisfactory. And for the world community, JCPOA is a vital platform in international security and is the top priority.

Trump doesn’t have the ghost of a chance to get the UN Security Council to sanctify new sanctions against Iran (on whatever pretext). And in the absence of UN mandate, this becomes an issue of his “America First” foreign policy.

Things will be different if Iran retaliates against these sanctions by exiting the JCPOA, pleading that Washington is backing out from the deal. But Tehran is instead playing an astute game. Foreign Minister Mohammad Javed Zarif said yesterday that Iran will not give a “gift” to Trump.

Zarif signalled that: a) Iran can live with Trump’s sanctions; b) Iran stands to gain more by complying with the JCPOA and earn international goodwill (especially among the world powers); and, c) Iran is utterly free anyway to pursue its missile program (which is indigenous and does not depend on Western technology).

What matters to Iran is that its successful (re)integration with the international community does not suffer any setback. So long as Iran can sell its oil and gas in the world market and so long as there is no sanctions regime with a cutting edge such as the one Barack Obama brilliantly succeeded in imposing (by getting even China and Russia on board), Iran can advance its development agenda.

In fact, Russia’s Gazprom just signed an agreement with Iran’s Oil Industries’ Engineering and Construction to develop Azar and Changuleh oil fields, Iran’s most recent discoveries located in the western province of Lorestan, which are believed to hold an in-place reserve of about 3.5 billion barrels of oil. (Azar is a joint field Iran shares with Iraq.)

Clearly, in the developing global scenario with the US-Russia relations nose diving – and no improvement possible in a foreseeable future – Russian military technology reaches Iran more freely than ever before. Iran’s strategic defiance of the US matters to the Russian strategy.

Equally, China views Iran as the regional hub in its Belt and Road Initiative. Only last week, China agreed to provide $1.5 billion as funding for the upgrade of the Tehran-Meshaad trunk railway line which connects Central Asia.

Suffice to say, if Iran can sell oil in the world market to generate income and with full-throttle cooperation with Russian and Chinese (and even some EU countries), Tehran will be doing reasonably well against Trump’s best-laid plans to “isolate” it.

The EU is giving an unmistakeable signal to Trump through the announcement on Saturday in Brussels that EU foreign policy chief Federica Mogherini will be travelling to Tehran on August 5 to attend the inaugural ceremony of President Hassan Rouhani in her capacity as the head of the Iran-5+1 Joint Commission monitoring the JCPOA. (In addition to Mogherini, French Foreign Minister Jean-Yves Le Drian has also announced his intention to participate in the event.

However, this is not to say that Trump will back off from his enterprise to punish Iran and bring about a ‘regime change’. Knowing Trump, he might well be planning to score a hat-trick by dumping the JCPOA sometime around September when the next certification on Iran’s compliance is due – thereby completing a trifecta of withdrawals from international agreements that he inherited from Obama (the other two being Trans-Pacific Partnership and the Paris accord on climate change.)

How does it all add up? By withdrawing from JCPOA, Trump will the isolating the US in international opinion. The political optic will be simply “disastrous” – to borrow Trump’s favourite idiom. The US will be the outlier.

Trump’s biggest challenge is that while the US’ allies support strict and verifiable implementation of the JCOPA by Iran, they disapprove of Trump’s game plan to create a pretext to collapse or renegotiate the deal. Even for proposing a renegotiation of the JCPOA, Washington needs five of the eight members of the Joint Commission (comprising US, UK, France, Britain, Germany, EU, Russia and China) to back the proposal.

Finally, as the Bible says, “Behold, a little cloud, like a man’s hand is rising” on the horizon – pressure is building over the release of Americans under detention in Iran. Some Iranian news reports recently mentioned the names of several Iranian citizens in jail in the US for sanctions violations.

Tehran could be signalling interest in a quiet conversation over a potential political prisoner exchange similar to what Obama administration once negotiated. Which, of course, requires the Trump administration to engage directly with the government of Iran.

July 31, 2017 | 2 Comments »

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2 Comments / 2 Comments

  1. @ adamdalgliesh:

    Hello, Adam.

    The United States of America is the most powerful country in the world, more powerful militarily than the Europeans, Japanese and Koreans combined; and also more powerful than the Russians and Chinese combined. Anyone wanting to take over the world, must first eliminate the US. Considering this, the “international community” is the aggregate of all our rivals — countries which want what we have, and would like to destroy us, if need be, to attain it.

    Is it any wonder, then, why the “international community” so often seems to be at odds with us, and we with it?

    Of course, they will not support what we are doing vis-a-vis Iran! nor concerning North Korea, nor Russia, nor the Muslims… the list goes on and on. It is simply a matter of self-interest, not requiring a supercomputer.

  2. This author supports appeasement of Iran. Wrong! He may be right, however, that the “international community” will not support sanctions. However, there are also unilateral moves that the U.S. can do–like locking Iran out of the system for converting foreign currencies to dollars, which the U.S. controls. Since the dollar is still the main currency for international trade, this will hurt Iran. The U.S. could also impose trade and investment sanctions on countries that trade with Iran, such as denying them the right to bid for U,S. bonds or treasury notes. The U.S. could sanction foreign as well as American banks that hold deposits from Iranian terrorist organizations, such as the Iranian National Guard. And the U.S. could step up aid to the internal Iranian resistance.